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Merchants availability is much smaller, there's much smaller total limit of merchants units.
With this tweak you get additional merchants only on some 'elite' trade buildings like Merchant Guild etc.
Tweak is highly configurable.

Merchants on 'capital' settlements are produced by 'Walls' building (always present in every settlement) - to achieve that every faction could produce one (or more if configured) merchant regardless of buildings. You can switch this off in options. So now for example, Serbia (in vanilla SSHIP no starting merchants and can't produce in one starting castle) can produce one merchant.

Merchant on all settlements are produced by market buildings, but markets don't increase merchants limit, this is done by other 'special' buildings as configured (see below).

save game compatible (except removing starting merchants of course, it will requires new game)

!! IMPORTANT !!
Within one particular settlement merchants limits from various settlements buildings do not stack, do not sum.
From one particular settlement you have merchant limit of one maximum value from all its buildings.

Configuration

You can configure this tweak as you like, click this tweak 'Options' See below screenshot.
You can change the configuration but please remember to confirm new parameter value with 'Enter' key and then 'Ok'.
Below is my actual configuration, you can set it as you like.